{"id":2206,"date":"2006-02-24T08:42:27","date_gmt":"2006-02-24T08:42:27","guid":{"rendered":"http:\/\/zmetro.com\/?p=2206"},"modified":"2006-02-24T08:42:27","modified_gmt":"2006-02-24T08:42:27","slug":"plus_shipping_a","status":"publish","type":"post","link":"https:\/\/www.zmetro.com\/?p=2206","title":{"rendered":"Plus Shipping and Handling……, Making Money on eBay"},"content":{"rendered":"

Alex Tabarrok<\/a>:<\/p>\n

<\/p>\n

\n

Would you rather pay $10 and have free shipping or pay $5 and pay $6 for shipping?  Answer: you prefer the latter.  Well, at least if you are like most bidders on eBay.  <\/p>\n

\n

Morgan and co-author Tanjim Hossain, an assistant professor at Hong
\nKong University of Science and Technology, held 80 auctions of new
\nmusic CDs and Xbox video games to test how consumers respond to
\ndifferent price schemes. In the eBay study, they varied the opening bid
\nprice and shipping charges on identical CDs, ranging from Britney
\nSpears to Nirvana, and video games, including Halo and NBA 2K2. <\/p>\n

…A
\nperfectly informed and fully rational consumer will merely add together
\nthe two parts of a price to obtain the total out-of-pocket price for an
\nitem and then decide whether to buy and how much to bid based on this
\ntotal price. <\/p>\n

But that’s not what happened
\nin their eBay auctions. Instead, they found that lowering the opening
\nbid price while raising shipping charges attracts earlier and more
\nbidders and ultimately leads to higher revenues compared with doing the
\nreverse. Those findings suggest consumers pay less attention or even
\ncompletely overlook shipping costs when making bids…<\/p>\n<\/blockquote>\n

The quote is from a writeup<\/a>, the full paper is
\n…Plus Shipping and Handling: Revenue (Non) Equivalence in Field Experiments on eBay<\/a> (subs required).<\/p>\n

Also check out the interesting data on online pricing at Nash-equilibrium.com<\/a>. <\/p>\n

<\/i><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Alex Tabarrok: Would you rather pay $10 and have free shipping or pay $5 and pay $6 for shipping?  Answer: you prefer the latter.  Well, at least if you are like most bidders on eBay.  Morgan and co-author Tanjim Hossain, an assistant professor at Hong Kong University of Science and Technology, held 80 auctions of […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,21,5],"tags":[],"_links":{"self":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/2206"}],"collection":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2206"}],"version-history":[{"count":0,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/2206\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}